POA O1

• Accounting - it is the system that measures business activities, processes that information into reports and communicates the results to decision-makers.
• Accounting - is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.
• Accounting - it quantifies business communication. For this reason, it is called the language of business
• GLOBALIZATION - is the acceleration and intensification of economic interaction among the people, companies, and governments of different nations.
• POLICY DEVELOPMENT - Globalization has been driven by policies that have opened economies domestically and internationally
• TECHNOLOGICAL DEVELOPMENT - Advances in information and communications technology, in particular, have dramatically transformed economic life.
• Ethics - it is concerned with right and wrong and how conduct should be judged to be good of bad.
• Ethics - It is about how we should live our lives and, in particular, how we should behave towards other people. It is therefore relevant to all forms of human activity.
• Business ethics - it tells what is right or wrong in the business situation, while professional ethics tells the same thing regarding a profession.
• Business ethics tells what is right or wrong in the business situation, while professional ethics tells the same thing regarding a profession.
• Ethical Dilemma - Business is a good source of _ _ because its primary purpose is to make profit. It is constant search for potential advantage over others such that business persons are under pressure to do whatever yields such advantages
• EXAMPLE OF ETHICAL DILLEMAS:

  • White collar crime
  • Whistle-blowing
  • Conflicts of interest
  • Fiduciary responsibilities
  • Sexual harassment
  • Discrimination
• Ethical Financial Reporting

  • Ethics is especially important in preparing financial reports because users of these reports must depend on the good faith of the people involved in their preparation. Users have no other assurance that the reports are accurate and fully disclose all relevant facts.
• Ethics is especially important in preparing financial reports because users of these reports must depend on the good faith of the people involved in their preparation. Users have no other assurance that the reports are accurate and fully disclose all relevant facts.
• Fraudulent Financial Reporting - The intentional preparation of misleading financial statements
• Sarbanes-Oxley Act

  • This act was signed into law by George W. Bush (July 30, 2002)
  • The law applies to all companies that are required to file periodic reports with the US SEC.
• Some of the major provisions of SOX are as follows:

  • The SEC is required to establish a full-time five -member federal oversight board that will police the accounting industry.
• Some of the major provisions of SOX are as follows:

  • Auditors must maintain financial documents and audit work papers for 5 years.
• Auditors and accountants can be imprisoned for up to twenty years for destroying financial documents and willful violations of the securities laws.
• Code of Corporate Governance

  • On April 5, 2002 the Securities and Exchange Commission of the Philippines issued Memorandum Circular No.2 otherwise known as the _ _ _ _. The Code of Ethics for Professional Accountants in the Philippines was recently adopted from the revised Code of Ethics for Professional Accountants developed by International Federation of Accountants (IFAC) and will be effective June 30, 2008. These events usher in a new era in the relationship among business, government, the investing public and other users of financial information
• Forms of Business Organizations:

  • Sole Proprietorship
  • Partnership
  • Corporation
• Sole Proprietorship - This business organizations has a single owner called the proprietor who generally is also the manager.
• Partnership - Is a business owned and operated by two or more persons who bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
• Corporation - Is a business owned by it’s stockholders
• Purpose of Business Organizations:

  • Service
  • Merchandising
  • Manufacturing
• Service - Companies perform services for a fee. (law firms, accounting and audit firms, stock brokerage, beauty salons, and recruitment agencies).
• Manufacturing - Companies buy raw materials, convert them into products and then sell the products to other companies or to final consumers (paper mills, steel mills, car manufacturers and drug manufacturers).
• Merchandising - Companies purchase goods that are ready for sale and then sell these to customers (car, dealers, clothing stores and supermarkets).
• Activities in Business Organization:

  • Financing Activities
  • Investing Activities
  • Operating Activities
• Financing Activities - Organizations require financial resources to obtain other resources used to produce goods and services.
• Investing Activities - Managers use capital from financing activities to acquire other resources used in the transformation process.
• Operating Activities - Involve the use of resources to design, produce, distribute, and market goods and services.
• Accounting - is a service activity. It’s function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions
• Accounting - is the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.
• Accounting - is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.
• Accounting - is an information system that measures, processes and communicates financial information about an identifiable economic entity.
• Pacioli

  • He introduces the double-entry accounting system - in which for every debet (should give) there exists a debet (should have or should receive)
• THREE BOOKS THAT LUCA PACIOLI DID:

  • SUMMA
  • JOURNAL
  • LEDGER
• In Summa, the memorandum is the book where all transactions are recorded, in the currency in which they are conducted, at the time they are conducted
• The second book, the journal, is the merchant’s private book. The entries made here are in one currency, in chronological order, and in narrative form.